Millions in federal emergency communications funding lost, diverted

Four years ago, Commerce Department officials were touting a new pilot grant program as a way to vault police, firefighters and other emergency responders into the age of high-speed broadband.

With seven grant awards, the agency promised to show how public safety agencies could use new data-delivery networks to beam suspects’ images to cops on the beat or life-saving video instructions to medics hunched over disaster victims.

But now, the public safety broadband communication program is in turmoil – and tens of millions of federal grant dollars have been lost or diverted to other purposes while a new agency sets out to build a nationwide emergency broadband network.

In Charlotte, federal delays prevented the city from deploying a new public-safety data network in time for the 2012 Democratic National Convention, and the project has since been scrapped, with $7.9 million of the $17 million in grant money spent and the rest being devoted to bolstering an existing system.

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More than two-thirds of the program’s $382 million in public safety grant money went to pilot projects won by Illinois-based Motorola Solutions Inc., which holds an estimated 80 percent share of the emergency two-way radio market. That’s ironic, because it was Motorola’s radio dominance that helped instigate the push toward a more competitive broadband market as the best way to build the new network.

Motorola won deals backed by grants from the National Telecommunications and Information Administration (NTIA) to build the first metropolitan-wide public safety broadband system in the San Francisco Bay Area and the first statewide broadband network in Mississippi. This spring, it captured the biggest prize: a $175 million contract for a 230-tower network in Los Angeles County.

​Yet Motorola won’t collect all of the money it expected after winning the projects financed by the three largest grants. The $70 million grant to Mississippi and a controversial, $50 million grant to Motorola for the San Francisco-area project have been scuttled. A $154 million grant to Los Angeles County is in jeopardy.

What has happened in the Commerce Department program, nearly 13 years after radio failures left more than 100 New York firefighters trapped in an imploding World Trade Center tower on Sept. 11, 2001, is emblematic of the continuing struggles of local, state and federal agencies to align money and policies behind seamless emergency communications networks.

It also reflects tensions over Motorola’s push to gain inroads to the broadband world – technology that threatens to eventually add reliable voice communications and supplant the company’s decades-old market for push-to-talk radios.

‘Corner the market’

Motorola’s lobbyists were instrumental in persuading Congress to open the door for the public-safety broadband grants, said an official of the Department of Homeland Security who was not authorized to speak for the record.

Motorola executives “see that their radio market is going to go away, so they clearly want to corner the market on existing (broadband) grants,” said Bill Schreier, a former chief technology officer for the city of Seattle who now works for Washington state. “If I was a company in their situation, I’d be using every possible method to try and corner that market.”

In a series of articles published in March, McClatchy detailed an array of tactics used by Motorola, including embedding proprietary features in its equipment so it couldn’t interact with non-Motorola equipment, to elbow out competitors and prolong decades of dominance over the two-way radio market.

By embedding proprietary features, Motorola put its state and local customers in the position of having to upgrade with its equipment or scrap their entire systems to shift to another vendor, locking in relationships for decades.

Motorola didn’t entirely abandon these tactics in seizing on the NTIA program to defend its franchise.

In both San Francisco’s and Mississippi’s projects, Motorola incorporated proprietary features in its handsets so they couldn’t interact with non-Motorola equipment, said several people who lacked authorization to speak publicly. Federal officials interceded and barred use of those devices, they said. After those grants were ended, they said, Motorola relented and is not using the software in Los Angeles County.

A Motorola spokesman declined to comment about the company’s alleged use of proprietary software in broadband systems.

Declan Ganley, CEO of New York-based Rivada Networks Inc., alleged that Motorola executives, now seeing their radio market at risk, have sought to use the Commerce grants as “their own bailout program.”

“When your business model doesn’t work anymore, just hit the taxpayer. It’s easier than innovation,” said Ganley, whose firm contends it can save taxpayers billions of dollars by reselling public safety agencies’ excess broadband capacity to commercial users during quiet periods.

Motorola said in a statement that it “has worked cooperatively, appropriately and lawfully with officials at all levels of government in the pursuit of opportunities where our broadband communications solutions, based on recognized industry standards,” can meet public safety agencies’ needs.

Ready to capitalize

The company, known as Motorola Inc. until it split in two in 2011, has made a specialty of tracking federal grant dollars for emergency communications.

In this case, Motorola’s maneuverings date to the depths of the nation’s financial crisis, when it got language slipped into President Barack Obama’s massive 2009 economic stimulus package that committed the Commerce Department to making emergency broadband communications a priority as part of a $4 billion program to expand Americans’ access to the technology.

The language was inserted at the behest of lobbyists for multiple companies, led by Motorola, said the Homeland Security Department official. Several of Motorola’s outside lobbyists publicly reported weighing in on the stimulus bill in late 2008 and early 2009, and one specified lobbying on “broadband policy.”

Steve Gorecki, a Motorola spokesman, said only that the company supported opening the grant program to public safety applicants, a position that Obama endorsed in March 2010. A few weeks later, the Federal Communications Commission cleared the way by granting waivers that allowed 21 jurisdictions to explore the technology.

Motorola was poised to capitalize. However, things went awry, partly because of the fits and starts of federal policymaking.

Rocky start

No sooner did the newly funded pilot projects begin to crank into gear than Congress took action that effectively brought them to a halt. In 2012, Obama signed into law legislation allotting a block of the federal wireless spectrum for a nationwide public safety broadband network and $7 billion toward its construction. The law created a new Commerce Department agency, the First Responder Network Authority, or FirstNet, to oversee this huge mission.

But the pilot projects presented a complication.

FirstNet’s creation “dramatically changed the assumptions” on which the grants had been issued. In May 2012, said Juliana Gruenwald, an NTIA spokeswoman. In May 2012, the NTIA suspended all seven projects until FirstNet was staffed and the new agency could determine, as it did in early 2013, that the projects provided “learning opportunities,” she said. FirstNet then offered to negotiate leases granting each jurisdiction use of a slice of the federal wireless spectrum, Gruenwald said.

The lease negotiations soon hit impasses with several jurisdictions on such issues as who would own and control the networks.

Last December, FirstNet’s board voted to halt funding for Motorola’s San Francisco grant and the grant to Mississippi.

While little work had been done in San Francisco, the Mississippi Wireless Communications Commission already had paid Motorola $32 million toward its statewide network. State officials have been asked to retrieve nearly $14 million in equipment mounted on transmission towers for use elsewhere, though the state will be allowed to keep $18 million in microwave equipment and $4 million in radios, NTIA said.

Charlotte program stumbles

Charlotte’s team was within a week of deploying the new system being built by Alcatel Lucent when the federal moratorium took effect, said Chuck Robinson, the city’s former director of shared services. Even a week’s delay was disastrous, he said, because it pushed the city beyond a deadline after which it would be forced to comply with new standards for transmission towers – adding millions of dollars to the city’s cost.

The city’s lease negotiations with FirstNet soon deadlocked.

Perhaps not coincidentally, Verizon Wireless slashed, from $60 to $35, the monthly per-user price of the existing, much slower commercial data-delivery network that has for years served police, firefighters and sheriff’s deputies in Charlotte, Mecklenburg County and neighboring jurisdictions, Robinson said. That was $12 lower than the new system’s rate.

In July 2013, the city elected to end the broadband project and stick with Verizon Wireless, even though emergency communications might be crowded out on its network during a crisis.

In January, program managers advised the Charlotte City Council that $7.9 million of the grant money was gone, spent on leases and other costs that ran up during the NTIA’s and FirstNet’s 15-month moratorium.

Steve Koman, who was a consultant to the city on the broadband project, estimated that $3 million in unused equipment sat in warehouses for more than a year until FirstNet asked the city to ship half of it to another project.

The NTIA permitted the city to spend the remaining $8.8 million of its grant money on its emergency communications system, with the understanding that it later would be deployed in a FirstNet-authorized public safety broadband network.

But Koman said there’s a “very high likelihood” that the equipment is “only going to work with Verizon,” unless a lot of additional money is spent.

Robinson questioned why the moratorium had to run so long. He noted that he was a member of an FCC technical advisory committee that drafted standards that the agency issued in August 2012 for public-safety broadband systems. Once the standards were issued, he said, the National Telecommunications and Information Administration could have lifted the moratorium, because every network had to comply and thus would be able to interact with the others.

However, as the standards were issued, FirstNet was only then naming its board of directors.